Renters feeling economic crunch

By James Thalman, Deseret News
Published: Tuesday, April 14, 2009 6:49 p.m. MDT

A national state-by-state status report on rental housing puts data behind what residents have been saying for years: When it comes to Utah's rental market, they can't make it here any more.

According to the National Low Income Housing Coalition, a family in Utah must earn $29,459 a year or $14.16 per hour to afford a modest two-bedroom, $736-a-month rental. That's 216 percent of the $6.55 minimum that average low-income earners make here.

Without assistance, the gap between what people in low-wage jobs earn and what rental housing costs in Utah is simply impossible, said Tara Rollins, executive director of the Utah Housing Coalition, which provided data for the report.

The Out of Reach report assesses the relationship between rental housing costs and the capacity of low-wage earners to pay for it.

"The numbers back what we've been saying the past five years," Rollins said. "Housing costs continue to rise to levels far beyond the reach of low-income workers."

Since 2005, the affordable hourly wage has increased from $12.95 to a little more than $14, she said.

State and local elected officials won't be surprised by the report, Rollins said, but "any effort to help ease the burden low-income Utahns face is basically already spoken for."

Palmer Court, the converted former Holiday Inn downtown, has begun taking new residents, but they are those who were facing homelessness well before the mortgage meltdown began in 2007, she said.

Other findings in the report:

Just 39 percent of Utahns are able to afford a modest, two-bedroom apparent under current market conditions.

Minimum wage workers earning $6.55 per hour must work 86 hours per week to afford a two-bedroom unit.

An extremely low-income household earning $19,361 — 30 percent of Utah's median income of $64,548 — can afford a monthly rent of no more than $484. The standard rent being charged is $736.

The Supplemental Security Income monthly payment is $674. An affordable rent at that income would be $202.

Utah ranks as the 23rd most difficult market nationwide. According to the Out of Reach report, a minimum-wage worker must work 64 ours per week, 52 weeks a year, or a household must have 1.6 minimum wage earners working standard 40-hour weeks all year in order to afford market-rate rents for a two-bedroom apartment in the Salt Lake area.

The report clearly shows a disconnect between what it costs to afford decent rental housing and what low-wage employment actually pays. Renters with the lowest incomes now face increasing rental prices and more competition because families who are losing homes through foreclosure are entering the rental market, according to the report.

"The long-standing structural deficit of rental homes that the lowest income people can afford, exacerbated by the economic recession, will surely lead to more people becoming homeless," said Sheila Crowley, president of the National Low Income Housing Coalition. "We hope that the report will demonstrate to policy makers the urgency of acting now to increase the supply of affordable housing and housing assistance for those who are hit hardest by the recession."

E-MAIL: jthalman@desnews.com
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